Times of uncertainty and overall luxury market slowdown as highlighted in previous articles have brought difficulties to several brands in the segment. However, regardless of current and recent success or struggles, trends in brand, diversification, and marketing strategies have changed significantly.

Driven by various factors for different brands, whether one calls it a more cautious approach or a focused one, after quite a few years of expansion and diversification, most OEMs in the segment seem to be pulling back on both product and marketing strategies.

Diversification

While quite a few brands in the segment had diversified quite aggressively in the past, some of these strategies have gradually changed. One of the best examples of this is Aston Martin. As discussed in a previous article (Not just Luxury Cars: Aston Martin Diversification Strategy), through the 2010s the British automaker started several partnerships and diverse activities that materialized in several limited products and concepts including the likes of bicycles, speedboats, real estate, and even submarines and aircrafts. The latest of these projects is probably the motorcycle AMB 001 developed along with British motorcycle manufacturer Brough Superior and introduced in 2020 for a limited run of 100 units sold for around £100,000.

*Aston Martin AMB 001

But Aston Martin is not the only one. Some of these activities continue and will most likely continue in the future. The collaboration with video game developers is by now one of the most established strategies in the industry in which every automaker takes part and that has even expanded in the last few years beyond just racing games.

Others however could have been a phase or one-offs to look for new opportunities or business models but seem to have been completely abandoned.

Real estate projects have been relatively popular for a while among luxury automakers, with the likes of Bugatti, Porsche, Pininfarina, and Bentley (as well as the just-mentioned Aston Martin) and more all entering partnerships with high-end developers for residential buildings in selected areas such as Dubai or Miami. These have recently slowed down or almost disappeared.

Similarly, various OEMs have also reduced the release of branded merchandise like Ferrari removing a significant share of everyday objects and accessories, or Bentley not following up on its collaboration with Fanatec for driving simulators steering wheels.

Product trends

On the product side, a key trend that seemed destined to get stronger in the coming years, but that, at least for now, has almost completely stopped is the production of one-offs.

An initiative that in the era of high customisation represented the absolute top of luxury automotive tailoring. Something that Ferrari has been doing for the past 20 years now, and that over the last 8 or 9 has been consistently growing with more OEMs developing similar initiatives year after year. This went on up until 2023, to almost completely stop in 2024.

Yearly One-Off and Few-Off production by Brand (2006-2023)

A similar result would be displayed if few-offs were included. 2024 saw only a few releases and only some were very limited (below 100 units) and presented significant updates compared to the “regular models” like the Lamborghini Huracán STJ released in only 10 units to celebrate the end of the model’s lifecycle.

It is still unclear whether this is just a casual slowdown, while the automakers continue developing their own personalisation programs, but the slowdown is certainly noteworthy.

On the product side, 2025  so far has also seen a substantial slowdown in the release of production models, with only 2 major releases by an established automaker consisting of Aston Martin’s convertible versions of its new Vantage and Vanquish models. This is certainly not only due to strategic changes, as over the last 5-6 years, most established brands released entirely new product lines that in this market tend to last between 5-10 years, sometimes without any significant mid-life refresh. That said, uncertainty with electrification in the luxury segment and other factors have certainly played a role too, and overall the release rate over the first 4 months of 2025 represents an average 71% slowdown compared to the previous 6 years.

Reversing Course on Electrification

As just mentioned this is probably one of the biggest factors of instability in the current market. As the electric vehicle market started developing legacy OEMs and luxury brands started working on the development of luxury EVs. But things did not go according to plan.

Porsche was among the first and its Taycan has been one of the fastest depreciating vehicles on the market reaching a -51% in just 4 years, with over 30% over just one.

Similarly, other OEMs that launched electric supercars or hypercars have struggled to sell out even extremely limited runs. It has been the case for the likes of Pininfarina and Rimac too which has been at the forefront of this transition right from the start. However, since the beginning, even Rimac’s CEO Mate Rimac has been quoted saying that customers in this segment simply do not want full-electric vehicles, which will likely force the brand to introduce hybrid powertrains facilitated by its joint venture with Bugatti. Aston Martin too has currently delayed its first EV.

As traditional strategies have not worked as expected, OEMs had to rethink or expand their plans. Ferrari, set to release the first fully-electric vehicle in 2025, is likely to introduce a unique vision for it as discussed in a previous article (New Luxury Automotive: Going Beyond Performance?).

*Porsche Macan EV

Porsche while still struggling in selling its GT Taycan, despite the mid-cycle refresh which brought several improvements, seems to have found a solution to successfully build its EV portfolio. In 2025, 25.9% of the vehicles sold were EVs, led by the recently introduced Macan EV SUV. Over the first 3 months of the year, the SUV sales grew by 14% to 23,555 units sold. Of these over 60% (14,185) were full-electric ones, confirming a certain appetite for comfortable and sporty family luxury vehicles rather than exclusively performance ones.

This trend is surely going to reflect on the marketing and product strategies of luxury OEMs preserving their strong identity instead of exclusively focusing on what the future holds for the industry, which in turn could also give them competitive advantages against upcoming competitors.

Refocusing on motorsport

Beyond Formula 1 which has been skyrocketing in popularity over the last few years, endurance is certainly getting more attention and become a key marketing tool for most legacy luxury performance brands.

Following Porsche and Ferrari, most other brands followed in rapid succession. Lamborghini announced its LMDh participation with the SC63, Aston Martin confirmed its entrance in the LMH category in 2025 with a racing version of its Valkyrie. Last but not least McLaren too announced they will be participating in the FIA endurance championship from 2027.

Conclusions

Luxury automakers’ marketing and programs' expansion slowed down over the past 1-2 years following difficulties in the industry for several brands driven by a general slowdown in automotive and in the larger luxury sector, along with changing trends in consumer preferences.

Where for a while it seemed like most companies were more and more frequently trying new strategies, these have ultimately been decreasing with automakers refocusing on core values, legacy products, and (when relevant) motorsport.

One exception however is coming from Ferrari. After the pull-back in diversification and the claim of wanting to become “a luxury brand”, a few days ago Chairman John Elkann announced a new project for a Ferrari sailboat coming soon. While the sailing segment is not exempt from crossovers with the luxury automotive one, this seems like it could be a larger project with a bigger commitment that will be discussed in future articles.

Pininfarina just presented its latest automotive partnership offspring, the luxury saloon car developed for Taiwanese Hon Hai Precision Industry (鸿海集团), better known as Foxconn Technology Group.

Most of those who know this company will associate it with smartphones. The Asian giant has in fact been for years the largest tech manufacturer in the world, reaching up to 40% of the world’s supply of consumer electronics (Apple, Sony, Xiaomi, Nokia, Oppo, Vivo, Huawei, and more). But that is rapidly changing.*Foxtron Model E

According to China’s National Monitoring and Management Center for New Energy Vehicles (新能源汽车国家监测与管理中心) in 2019, 486 new energy vehicle companies successfully applied and were registered, and 5,827 models passed the vehicle compliance test. A big part of this is the ‘Made in China 2025’ plan devised to promote the development of ten strategic industries, among which is also the new energy mobility through subsidies and rebates.

Ithome quotes the Ministry of Industry and Information Technology’s minister Xiao Yaqing who is encouraging the local governments to leave to the market the role of defining the Chinese EV market. This should eventually lead (as it happened in other sectors) to mergers, reorganisation, and market consolidation.  

WHAT ABOUT THE FUTURE OF CHINA’S LUXURY AUTOMOTIVE SEGMENT?

A few months back in the article EV Market Growth 3 years later: China and the rest of the world a look at the 10 best-selling Chinese EV models highlighted how despite cheap cars dominating the market, Tesla topped it with Model 3. Tesla’s fastback is not just the only foreign EV in that list, but also quite above the average price of most of the models right below it. This shows that there is still an interest for foreign products in the top end of the market (considering also the reputation Tesla’s brand has in the early adopters’ community that other established brands don’t have).

2021 will be an interesting indication of how this market segment has evolved as several premium American and European companies have delivered electric vehicles for the entire year. For instance, Porsche that has a strong presence in Asia with China as its biggest national market recorded strong growth in 2021 since the first quarter even in the electric segment.

In several tech-intensive industries, Chinese companies have been able to gain leading positions in just a few years thanks to their strong innovative push and radically different approach from their competitors.

Cars however represent a much bigger investment and thus also one on which, as of now, consumers are more emotionally involved. So it is easier to imagine customers relying more on well-known brands at least in the short to medium term in foreign markets. On domestic soil, however, the strong creativity and brand diversification, such as the one shown by Human Horizons HiPhi X, help a few of these brands gain that reputation to become the ‘next Tesla’ with young generations.

One key factor for the success of these start-ups could be the change of car ownership standards. If car-sharing keeps becoming more popular (which should not be taken for granted), EV start-ups could more easily penetrate new markets through public fleets contracts. In turn, this would also help increase brand awareness. According to McKinsey, the global shared-mobility market value in 2019 stood between $130 and 140 billion (£94-101 billion). Its presence in Europe and America, however, is not as strong as it is in China.

*Source:McKinsey

Bentley Motors announced a few days ago the development of its latest project. A 60-stories building co-developed with American developer Dezer to offer a Bentley branded residence experience featuring lots of amenities. Among these, probably the most striking is the so-called ‘Dezervator’, an elevator that will allow owners to bring up with them up to 4 vehicles and park them alongside their apartment.

*Source:Bentley Media - Bentley Branded Residence

This solution was already featured, a while back, in the Porsche Design Tower, developed once again by Dezer with the German automaker.

Bentley in fact is just the last one of a fast-growing list of luxury automakers and luxury brands approaching this market. Before the British marque, similar developments have been started, or are already in the pipeline for Aston Martin, Bugatti, Mercedes, Pininfarina, Porsche, and Tonino Lamborghini(at least in a way related to the automaker).

Branded Residences have been a growing trend in the luxury industry for a while now. It is gradually expanding to lower segments of the market too. But while the vast majority of these projects is still handled by Hoteliers (Marriott being the largest), automakers now constitute a consistent share of this niche.

But how does it work and why would a low-volume automaker develop and sell or rent a super-luxury residence?

A MARKET OVERVIEW

The competition in the top-end of the luxury market is becoming fiercer. Along with automotive manufacturers, also fashion brands are approaching it. So, for anyone interested you could also decide to buy, or book a long-stay in an Armani Residence in Dubai, or a Missoni one in Miami.

Clients in the niche are becoming more and more demanding. A high level of customer service is expected,so brands have to constantly come up with new, innovative, and unique solutions to lure the attention of their selected clientele.

*Source:Savills 

Required services might vary from more basic ones like mail and package delivery, restaurant, spa and salon reservations, golf courts, 24/7 security, various loyalty scheme, and Concierge services, to on-demand like housekeeping, laundry services, in-home dining service, personal shopping, personal trainer, spa treatments, childcare services, pet services, meeting room services/office equipment, use of the guest suite. From there, pretty much anything is possible and it represents an added value for the clients. Yacht Marinas, Art Galleries, Shops, Meditation rooms, Movie theatres.  Prices vary from $1 million up to around $50.

According to Savills three are the main locations in terms of Branded Residences available schemes. Miami, Dubai, and New York. Asian Cities are instead the fastest growing. On top Hangzhou, Guangzhou in China, and Seoul in South Korea with a projected growth of 189%, 180%, and 78% over the next 5 years respectively.

Additionally, while right now the Automotive marques share of this market is around 5%, this is set to grow up to 24% by 2025, second, as a non-hotel brand, to fashion ones at 28%.

AUTOMAKERS COMPETITION AND OBJECTIVES

On the one hand, this is an interesting diversification solution in a market that is steadily growing and is relatively new. On the other hand, some risks must be taken into account.

The branding of these buildings is usually licensed by the marques to the developers, and later the owners will also pay some fees on it. Other earnings can come from design work and technical consultancy. So, while this represents an additional stream of revenues, there might be risks connected with brand image. The reduced control over the property management might affect negatively the company’s name if the services or facilities are not considered up to standard.

If money is invested too in a different type of contract the risk might increase. This is in fact a very competitive niche and with a small customer base. Luckily, at this end of the market, with the asked price in the tens of millions, the possibilities are almost endless. So, luxury automakers and their partners have to rely on features and services that other brands outside the automotive niche cannot, or would not think about.

*Source:Aston Martin Residences - Aston Martin Residence Penthouse Floor plan

First of all, the design can be daring and become a stand-out characteristic when it is related to a supercar manufacturer more than a regular hotelier. As for special features, the car elevator paired with the sky garage is one. But probably the most emblematic is Aston Martin’s $50 million penthouse that includes in the deal a 1 of 24 track-only Vulcan plus track driving lessons and a membership to a private track club. This kind of deal along with the experience itself offers proper access to the brand’s life and promises a continued experience in time.

Some projects have a different drive. It is the case of Pininfarina. As discussed in the review of the automotive coachbuilding sector, throughout the years as the bespoke automotive production faltered, brands like Pininfarina have expanded becoming full-fledged design houses. In this case, the architectural design, as well as the sustainability principles applied are fully coherent with the brand’s portfolio and new image.

*Aston Martin Vulcan

CONCLUDING THOUGHTS

All in all, this market offers clients the opportunity of buying a property that includes every amenity and service imaginable, but at the same time also becomes part of a brand and its lifestyle. And this was probably the main driver for the entry of automotive and fashion (and other non-hotel) firms in this space.

This niche is new, so there might be doubts about its long-term resilience when it comes to properties that command such huge premiums, especially after this difficult year. Nonetheless, branded residences can become an important marketing tool for luxury automakers. They can help to further increase the marque’s exclusivity factor, promote their values, such as sustainability in the case of Bentley through design, materials, and innovation, and create a closer relationship with the clients inspiring brand loyalty.

Italian iconic coachbuilder and design firm Pininfarina and start-up Britishvolt announced a collaboration to build the first UK EV Battery Giga-Factory. The project is set to bring the UK at the forefront of the automotive industry evolution to compete not only with the US’s Tesla Giga-Factory but also with numerous competitors that are increasingly crowding this space in Germany, Poland, and more.

*Silvio Pietro Angori, Pininfarina CEO and Lars Carlstrom, co-founder of Britishvolt

The term hypercar usually indicates a vehicle sitting at the very top segment of the market in terms of pricing, performance, and customer experience. As one could expect, it is a market reserved for a really small crowd of wealthy. This market niche has become quite crowded in just a few years though.

Many new companies are entering this niche despite the Automotive industry being notoriously a sector with really high entry barriers. The reasons for this are various, along with the general direction of the mobility sector and environmental regulations. The nature of the EV itself lowers these barriers. As a product requires less engineering complexity and makes it easier to achieve eye-catching performance and numbers.

*Lotus Evija